8-K: Peraso Q2 2025: mmWave Growth Amid Revenue Decline

Peraso Inc. reported mixed second-quarter 2025 results, with significant mmWave product revenue growth offset by a decline in total net revenue due to the completion of end-of-life memory IC product shipments.

Summary

• Total net revenue for Q2 2025 was $2.2 million, a decrease from $3.9 million in Q1 2025 and $4.2 million in Q2 2024.
• Product revenue for Q2 2025 was $2.2 million, compared with $3.8 million in Q1 2025 and $4.1 million in Q2 2024.
• mmWave product revenue increased 45% sequentially and over 200% year-over-year.
• GAAP gross margin for Q2 2025 was 48.3%, down from 69.3% in Q1 2025 and 55.5% in Q2 2024, primarily due to revenue mix being entirely mmWave products.
• GAAP net loss for Q2 2025 was $1.8 million, or ($0.31) per share, compared with a net loss of $0.5 million, or ($0.08) per share, in Q1 2025.
• Non-GAAP net loss for Q2 2025 was $1.7 million, or ($0.28) per share, compared with a net loss of $0.4 million, or ($0.07) per share, in Q1 2025.
• Adjusted EBITDA for Q2 2025 was negative $1.6 million, compared with negative $0.3 million in Q1 2025.
• Total operating expenses on a GAAP basis for Q2 2025 were $2.9 million, down from $3.2 million in Q1 2025 and $6.8 million in Q2 2024, primarily due to reduced stock-based compensation and fully amortized intangible assets.

Sentiment

Score: 4

Explanation: The sentiment is mixed to slightly negative. While mmWave product revenue growth is a strong positive and indicates strategic success in a key area, the overall financial results (total revenue, net loss, EBITDA) are worse than the prior quarter and year due to the discontinuation of legacy products. The company also explicitly lists 'ability to continue as a going concern' and 'ability to raise additional capital' as risks, which are significant concerns for investors.

Positives

• mmWave product revenue increased 45% sequentially and over 200% year-over-year, indicating strong demand and strategic focus.
• Achieved a significant milestone of surpassing two million cumulative shipments of mmWave devices.
• Tachyon Networks selected Peraso's mmWave module for its 60 GHz fixed wireless solution, expanding market reach in fiber-class broadband deployments.
• Delivered first production shipments of advanced 60 GHz wireless solutions for a mission-critical defense application.
• Shipped a production order for a customer's wireless video system for classroom environments, expanding into education applications.
• Anticipates continued sequential growth and record revenue contribution from mmWave products in Q3 2025, supported by an existing pipeline of customer engagements and growing order backlog.
• Maintained disciplined expense management, with operating expenses decreasing sequentially and year-over-year.

Negatives

• Total net revenue decreased to $2.2 million in Q2 2025, a significant drop from $3.9 million in the prior quarter and $4.2 million in the same quarter a year ago.
• The decrease in total revenue was primarily attributable to the completion of end-of-life shipments of memory IC products.
• GAAP gross margin decreased to 48.3% in Q2 2025 from 69.3% in the prior quarter and 55.5% in the same quarter a year ago.
• GAAP net loss widened to $1.8 million, or ($0.31) per share, in Q2 2025 from $0.5 million, or ($0.08) per share, in the prior quarter.
• Non-GAAP net loss widened to $1.7 million, or ($0.28) per share, in Q2 2025 from $0.4 million, or ($0.07) per share, in the prior quarter.
• Adjusted EBITDA worsened to negative $1.6 million in Q2 2025 from negative $0.3 million in the prior quarter.

Risks

• Ability to continue as a going concern.
• Ability to raise additional capital to fund operations.
• Ability to maintain compliance with the continued listing requirements and standards of the Nasdaq Stock Market.
• Risks related to the process of reviewing and exploring potential strategic alternatives, which may be time-consuming, distracting, and disruptive to business operations.
• Annual expense savings expected from cost reduction initiatives may not be fully realized.
• Timing of customer orders and product shipments.
• Risks related to pandemics, wars, and terrorist activities that may have an adverse impact on business and financial results, and result in component shortages and increased lead times.
• Inflationary and tariff risks.
• Customer concentrations and length of billing and collection cycles, which may be impacted in the event of a global recession or economic downturn.
• Lengthy sales cycle.
• Ability to enhance existing proprietary technologies and develop new technologies.
• Achieving additional design wins for products through the acceptance and adoption of technology by potential customers and their suppliers.
• Difficulties and delays in the production, testing, and marketing of products.
• Reliance on manufacturing partners to assist successfully with the fabrication and production of products.
• Impacts of the end-of-life of memory products.
• Availability of quantities of products supplied by manufacturing partners at a competitive cost.
• Level of intellectual property protection provided by patents, and the expenses and other consequences of litigation, including intellectual property infringement litigation.
• Vigor and growth of markets served by customers and operations.

Future Outlook

The company anticipates continued sequential growth and record revenue contribution from its mmWave products in the third quarter of 2025, with total net revenue expected to be in the range of $2.8 million to $3.1 million. Management is focused on ramping production shipments for an expanding customer base and maintaining disciplined expense management.

Management Comments

• "Second quarter shipments reflected increased demand, as we continued to ramp shipments of our mmWave products."
• "Highlighting the sustained market leadership of our 60 GHz solutions, we recently achieved a significant milestone having surpassed two million cumulative shipments of our mmWave devices."
• "Looking ahead, we are focused on continuing to ramp production shipments in support of an expanding customer base for our mmWave solutions, while also maintaining disciplined expense management."
• "Based on our existing pipeline of customer engagements, as well as growing order backlog, we anticipate continued sequential growth and record revenue contribution from our mmWave products in the third quarter of 2025."

Industry Context

Peraso operates in the high-performance 60 GHz unlicensed and 5G mmWave wireless technology sector, a growing area for applications like fixed wireless access, immersive video, and factory automation. The company's focus on mmWave solutions aligns with the increasing demand for high-speed, low-latency wireless connectivity, particularly in emerging markets such as fiber-class broadband deployment in urban and rural areas, mission-critical defense communications, and specialized education applications. The shift from legacy memory IC products to solely mmWave products reflects a strategic pivot towards higher-growth, specialized wireless markets.

Comparison to Industry Standards

• The filing highlights a partnership with Tachyon Networks, which selected Peraso's mmWave module for its 60 GHz fixed wireless solution, indicating a successful design win with a notable partner in the broadband sector.
• Production shipments for a mission-critical defense application and a wireless video system for classroom environments demonstrate successful penetration into specialized, high-value markets.
• No specific financial or operational benchmarks against direct competitors or broader industry averages are provided within the filing to allow for a detailed quantitative comparison.

Stakeholder Impact

• Shareholders are impacted by declining total revenue, widening net losses, and the explicit risk of the company's ability to continue as a going concern and potential need for additional capital, which could lead to dilution.
• Employees were impacted by past layoffs (November 2023, Q1 2024) as part of cost reduction initiatives.
• Customers are seeing continued ramp of mmWave product shipments and new design wins (Tachyon Networks, defense, education), indicating positive engagement and expansion of the customer base for mmWave solutions.

Next Steps

• Continue to ramp production shipments in support of an expanding customer base for mmWave solutions.
• Maintain disciplined expense management.
• Host a conference call and webcast on August 11, 2025, to discuss results and outlook.

Key Dates

Recommendation

While the company demonstrates strong growth in its strategic mmWave product line and is expanding its market reach, the overall financial performance is currently deteriorating due to the sunsetting of legacy products. The explicit mention of "going concern" and the need for "additional capital" as risks are significant red flags. An investor should hold to monitor if the mmWave growth can fully offset the legacy product decline and lead to overall revenue and profitability improvements, and to assess how the company addresses its capital needs and going concern risk. The current financial state does not support a "buy" given the overall revenue decline and losses, but the mmWave segment's performance prevents a "sell" recommendation.

Keywords

mmWave, wireless technology, 60 GHz, fixed wireless access, semiconductor, chipsets, broadband, defense, education, NASDAQ: PRSO